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Negotiating Power by Prof Katia Tieleman

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Although people often think of boardrooms, suits, and million dollar deals when they hear the word “negotiation,” the truth is that we negotiate all the time. For example: ask your boss for a raise or …

Although people often think of boardrooms, suits, and million dollar deals when they hear the word “negotiation,” the truth is that we negotiate all the time. For example: ask your boss for a raise or a training, make important business decisions with your team… These are all situations that involve negotiating! This workshop will give you an understanding of the phases of negotiation, tools to use during a negotiation, and ways to build win-win solutions for all those involved.

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  • 1. NEGOTIATING POWER PROF KATIA TIELEMAN #EXPERIENCEVLERICK
  • 2. © Vlerick Business School #experiencevlerick2
  • 3. 1.NEGOTIATION PARAMETERS
  • 4. © Vlerick Business School PARKER GIBSON HALF LOT WILLOW STREET #experiencevlerick4
  • 5. © Vlerick Business School  Consistently outperforms a low aspiration base.  Yet leaves enough room for necessary concessions to achieve a win more-win more outcome.  Promotes positive psychological energy.  Communicates confidence and negates irrational negotiation behaviour.  Pressurises the other party to use more energy to lower your aspirations, so they concentrate less on promoting their own aspirations.  “Anchors" the negotiation.  Beware, an AB could be seen as a position - use a range rather than a firm number.  Parties must aspire to a shared AB that meets their shared interests best.  Consistently outperforms a low aspiration base.  Yet leaves enough room for necessary concessions to achieve a win more-win more outcome.  Promotes positive psychological energy.  Communicates confidence and negates irrational negotiation behaviour.  Pressurises the other party to use more energy to lower your aspirations, so they concentrate less on promoting their own aspirations.  “Anchors" the negotiation.  Beware, an AB could be seen as a position - use a range rather than a firm number.  Parties must aspire to a shared AB that meets their shared interests best. ASPIRATION BASE (AB) – A HIGH ASPIRATION BASE Negotiaton to create value5
  • 6. © Vlerick Business School  Point beyond which an agreement is no longer meaningful.  If you don’t understand or know your real base:  It will most likely lead to a point where a mutually beneficial outcome is not longer possible.  It makes it impossible to establish the contracting zone because this rests between the RB’s of the parties.  You can be exploited because you don’t know the point where you should withdraw from a negotiation.  Beware, RB can cause thought closure and a positional stance. REAL BASE (RB) - MINIMUM REQUIREMENT FOR AGREEMENT #experiencevlerick6
  • 7. © Vlerick Business School  Reduces dependency on the other party’s agreement.  Ensures the other party does not over-inflate its position.  The stronger the BATNA the greater the negotiating power.  The more readily a negotiator can walk away from a negotiation, if necessary, the greater the negotiator's ability to influence the negotiation.  Knowing the alternatives available to the other side is essential to prepare for a negotiation.  A BATNA protects a negotiator from  accepting an agreement that is unfavourable  accepting an agreement that is only in the counterparty's best interests  Knowing your BATNA is knowing what to do when the negotiation fails.  The decision to reveal or not reveal a BATNA must be based on the strength of the BATNA and whether disclosing it is likely to weaken the counterparty’s negotiation stance. BEST ALTERNATIVE TO A NEGOTIATED AGREEMENT (BATNA) #experiencevlerick7
  • 8. © Vlerick Business School CONTRACTING ZONE SELLER BUYER Contracting Zone / Zone of Possible Agreement (ZOPA) AB Sellers Best Scenario Sellers Worst Scenario RB Buyers Best Scenario AB Buyers Worst Scenario RB BATNA Seller BATNA Buyer #experiencevlerick 8
  • 9. © Vlerick Business School TAKEAWAYS Power - Information is power. - Time is power. - First offers act as an anchor. Relations - Negotiation as an event is different from the process of the negotiation. - Victims become aggressors - Walkaways are better when soft. #experiencevlerick9
  • 10. 2.FROM BARGAINING TO VALUE CREATION
  • 11. © Vlerick Business School FROM BARGAINING TO VALUE CREATION I versus I Win-Lose bargaining We Value creation Win - Win To achieve value creation one must: • Verify assumptions • Change positions • Explore interests #experiencevlerick 11
  • 12. © Vlerick Business School  Seemingly opposed positions are not always opposed when it comes to the underlying interests, they could be compatible.  Don’t just split the pie in half. Make concessions on those issues that are not important to you, but valued by the other party. Joint Problem Solving Joint Opportunity Finding Interests can be: OPPOSITE COMPLEMENTARY SIMILAR Win more – Win more We Value creation Win - Win TO WIN MORE- WIN MORE: FOCUS ON COMPLEMENTARY INTERESTS #experiencevlerick 12
  • 13. © Vlerick Business School FEEL LIKE SOME MORE?  Negotiating to Create Value (November 2013) 13 #experiencevlerick
  • 14. Negotiaton to create value14
  • 15. THANK YOU! #EXPERIENCEVLERICK